Revenue to coal producing counties

FRANKFORT — Senate Democratic Floor Leader Ray S. Jones pre-filed legislation recently that would help create jobs and boost the economy in the state’s coal producing counties. His bill, cosponsored by Sen. Johnny Ray Turner, would require that 100 percent of revenue from the coal severance tax return to Kentucky’s coal producing counties for that very purpose.

“The country may be recovering from the recession, but Kentucky, despite an overall increase in employment, still has regions where people are going through hard times,” said Jones, D-Pikeville. “That is especially true in eastern Kentucky where mining has played a vital role in the economic makeup of our area. Returning the coal severance money to these counties could be a critical step in job creation, economic development, and, frankly, in the future of eastern Kentucky.”

The coal severance tax is approximately 5 percent levied on every ton of coal mined in Kentucky.

In the past, 50 percent of revenue from the coal severance tax has been prorated for expenditures in coal producing and coal affected counties. However, with the declining tax receipts, Jones said all the tax revenue need to go to these counties to allow them to focus on creating jobs — the original intent of the tax.

“The coal severance revenue should be allocated for improvements to the infrastructures to better equip these counties to attract new business and industry,” he said. “Better roads and bridges, modern water and sewer lines/facilities, and enhanced public safety are components necessary for developing an area and making it a viable place for new businesses and industry to locate. We need them to come to eastern Kentucky and we need them to bring more jobs. Jobs are the lifeblood of our community’s success and we need to create more of them to address the deficiency in our job market.”

Jones’ legislation mandates that all the revenue return to the coal producing counties.

“With mining communities suffering, we must take a more aggressive stance in creating new jobs,” said Jones, who represents the 31st district that includes Elliott, Lawrence, Martin, Morgan and Pike counties. “As a lifelong resident of a coal-producing region, this Pike Countian can tell you unequivocally that we cannot afford to lose any more jobs in our coal producing counties. Now, perhaps more than ever, all the coal severance tax revenue needs to return to the counties from where it generated. And, truthfully, this legislation is long overdue.”

Turner, D-Prestonsburg echoes the importance of this piece of legislation

“The loss of mining jobs and decline in coal severance revenue puts us at a crossroads in eastern Kentucky,” said Turner, who represents the 29th District that includes Floyd, Letcher, Knott and Harlan. “We have to have the infrastructures in place in order to get companies and investments to locate in our region. The improvements from these funds will lead to the creation of new jobs. The intent of the coal severance tax was to increase job opportunities in our coal counties. This legislation will result in new jobs and more economic development.”

County judge executives from the coal producing counties support the legislation and agree on its impact and importance in creating more jobs.

“I have seen the decrease in our coal severance money and the results thereof. It is very difficult to continue to fund our much needed road and bridge projects with half the money we used to receive to work with,” said Lawrence County Judge-Executive John Osborne. “I support having 100 percent of coal severance revenue be returned to coal producing counties.”

“We are seeing a strain on budgets in coal producing counties because of the reduction in the LGEA and coal severance funds due to the loss of coal production and jobs,” said Floyd County Judge-Executive Ben Hale. “Returning 100 percent would be a big boost to coal producing counties.”

“I admire Senators Turner and Jones for filing this piece of legislation for coal producing counties during these difficult times,” said Harlan County Judge-Executive Dan Mosley. “This is a very meaningful piece of legislation for us as we’re trying to balance our budgets. For many years, money has been taken out of coal producing counties. Today, we still have counties that are underserved I the areas of water and sewer. One hundred percent would definitely help our region with economic development and infrastructure.”

“Returning 100 percent of coal severance tax dollars back to the communities in which the coal is mined is not only the fair thing to do, but also financially prudent,” said Letcher County Judge Executive Jim Ward. “This will help us diversify our economy and increase job prospects while also ensuring basic services are provided to our citizens.”

“In Knott County, our severance tax proceeds have dropped from $5 million to $1 million in the last two years alone,” said Knott County Judge-Executive Zach Weinberg. “This drastic drop in revenue has hit every coal producing county in eastern Kentucky. We need the return of all of our severance tax dollars to our counties to provide essential services to our citizens. Support for a bill to return all severance taxes to the county of origin is the best economic development tool available to the commonwealth of Kentucky. It will drive economic growth in both eastern and western Kentucky in this time of transition.”

The Kentucky General Assembly may consider this coal severance legislation when it convenes in January.